United States

Department of

Agriculture

Rural BusinessCooperative

Service

RBS Research

Report 158

USDA -a

Strategies for Survival

by Cooperative Country

Elevators-Revisited
The structure and operations of local cooperative elevators were affected by excess

storage capacity, modifications in Government programs, and other factors during the

late 1980s and early 1990s. While the reduction in Government storage payments had

the greatest impact on elevator operations, other programs such as Payment-In-Kind

(PIK), Government grain sales (Commodity Credit Corporation (CCC) catalog and auction sales), and Conservation Reserve Program (CRP) also affected cooperative elevator activities. In 1988 and 1992, 71 cooperative managers were asked to rank a number of factors that affected cooperative operations and management strategies used as

a practical response. This report presents these rankings and analyzes management

strategies implemented between 1988 and 1992 and their degree of success.

Keywords: Farmer cooperatives, grain, marketing, structure, operations, Government

policy

Strategies for Survival by Cooperative Country Elevators-Revisited

United States Department of Agriculture

Rural Business-Cooperative Service

Marc Warman

FIBS Research Report 158

Larry Stearns

David W. Cobia

North Dakota State University

December 1997
Executive

Summary

Highlights

In the late 1980s and early 1990s managers of cooperative country elevators changed

management strategies to adapt to excess capacity, the rise and fall of Federal farm

programs, and other factors. While the reduction of Government storage payments had

the greatest impact on elevators, the introduction of and changes in other programs

also had their impact. These programs included Payment-In-Kind (PIK), Government

grain sales (Commodity Credit Corporation (CCC) catalog and auction sales), and the

Conservation Reserve Program (CRP) acreage reduction.

In 1988, North Dakota State University (NDSU) surveyed 87 cooperative elevator managers (Gunn and Cobia) about the structure and operations of their cooperatives and

possible management strategies to offset income loss from changes in Government

programs.

In a 1992 followup study, 71 of the initial 87 cooperative managers were again surveyed. This report analyzes their responses and concentrates on the ranking of factors

that affected elevator operations, proposed managerial strategies they have tried, the

degree of success, and the importance in keeping the cooperative elevator viable. A

companion report (Responses of Cooperative Elevators to Changes in Government

Policies, RBS Research Report 153) analyzes the structural and operational changes

that occurred between 1988 and 1992 and their impact on the financial condition of the

cooperatives.

The 1988 participating cooperatives were classified by production region, progressiveness, and size. All cooperatives were kept in the same classification grouping in 1992

to allow comparison of the changes. Only cooperatives responding to both surveys

were analyzed.

Reduced Government storage payments had the greatest effect on elevator operations. Forty-one of the 71 respondents ranked this highest and 14 others ranked it 2nd.

It was also ranked highest in 1988. The effects of other farm programs ranked 2nd.

Cooperative managers ranked the farm crisis and interest rates 3rd and 4th, respectively, a switch in places from 1988. This was due mainly to lower rates in the early

1990s.

In 1992, as in 1988, managers ranked the introduction of unit trains 5th, but said their

impact had worked its way through the industry and its effect had decreased since

1988.

While mergers ranked 6th in both studies, it was the only factor to show a significantly

increased impact from 1988 to 1992. Ten of the 71 responding cooperatives had been

involved in mergers between 1988 to 1992. Rail abandonment ranked 7th in importance in both studies, although its effect decreased between 1988 and 1992.

The “other factors” category added in the 1992 study ranked relatively high. However,

only 15 managers ranked it compared to 67 ranking Government storage and 34 ranking rail abandonment. Other factors included the availability of rail cars, drought, and

increased competition.
Attracting new patrons, changing merchandising practices, and more efficient use of

labor were the top three ranked management strategies in 1988.

In 1992, managers ranked changing merchandising practices as the most successful

practice followed by labor use and attracting new patrons. Fifty-eight of the managers

(85 percent) tried changing merchandising practices and it was successful 97 percent

of the time.

Between 1988 and 1992, managers made better use of personnel, including transferring them to other activities during slack periods.

The top three ranked management strategies were successful in more than 70 percent

of the cooperatives. The rest were sorted into two groups. The first group was successful 30 to 50 percent of the time. These are decreasing transportation costs, mergers and acquisitions, increasing margins, adding marketing services, other alternatives

for increasing revenue, changing blending and cleaning practices, and changing discounts and premiums.

The least successful group of management strategies in terms of overall success were

considered very successful by managers who implemented them-decreasing advertising, controlling expenses, coordinating deliveries, reducing debt, reducing inventory,

and offering shorter weekend hours.
Contents Introduction.. ............................................................................................................... 1

Classification Scheme ...................................................................................... 2

Selected Developments.. ........................................................................................... 2

Ranking Impacts.. ............................................................................................. 4

Differences Among Groups .............................................................................. 5

Production Region.. .................................................................................. 5

Progressiveness ....................................................................................... 5

Size ........................................................................................................... 5

Management Strategies.. ........................................................................................... 5

Production Region ............................................................................................ 6

Progressiveness ............................................................................................... 8

Size ................................................................................................................ 8

Summary and Implications ........................................................................................ 8

References ................................................................................................................ 9

Appendix A .............................................................................................................. 10

Appendix B .............................................................................................................. 14

111
Strategies for Survival by Cooperative

Country Elevators-Revisited

I,arry Stearns

Research Assistant

North Dakota State University

IIavid W. Cobia

IXrector, Quinton N. Burdick Center for Cooperatives

North Dakota State University

Marc Warman

Agricultural Economist

Rural Business-C‘ooperative Service

Introduction

Various events and structural changes in the U.S.

grain marketing system during the past 20 years had a

tremendous effect on farmer-owned cooperatives.

Mergers, acquisitions, and bankruptcies prompted

consolidations among cooperatives. Changes in

(jovernment policies and trading practices have forced

the entire grain industry to alter operating practices.

Adjustments are still occurring.

Reduced Federal storage income had the greatest

effect on the grain marketing system. Once this income

was lost, the entire grain handling system faced severe

storage overcapacity. Competition intensified in merchandising (Warman 1993). Cooperative elevator managers implemented new management strategies,

merged with nearby elevators, and diversified services.

In 1988, North Dakota State University (NUSU)

surveyed 87 cooperative elevator managers (Cunn and

Cobia) about their structure and operations. Managers

were also asked to discuss strategies to compensate for

lost Government income.

In a 1992 followup survey, 71 of the original 87

cooperatives provided new information on structure,

operations, and management strategies. Of the rest,

four elevators were sold to another company, two went

out of business, and IO managers chose not to participate (table 1). (For a survey copy, contact The Quintin

N. Burdick Center for Cooperatives, North Dakota

State University, Fargo, ND 58705)

This report analyzes the responses of the 71 managers who participated in both surveys. It concentrates

Table I-Number Of respondents, reasons for nonparticipation in 1992 survey

Non-participation

Group

Number of Sold to another

respondents elevator Liquidated Refusal

All

Production Region

Spring Wheat

Corn

Winter Wheat

Progressiveness

Progressive

Intermediate

Conservative

Size (Storage Capacity)

Small

Medium

Large

71 4 2 10

23 4 1 4

26 0 1 1

22 0 0 5

25 0 1 4

29 2 0 1

17 2 1 5

21 1 1 6

24 1 0 4

26 2 1 0

1
dLl~e I Frequency distribution of factors affecting cooperative financial status by managers of 71 selected

grain marketing cooperatives, 1992

Factor 1

Frequency of ranking 1992 1988

2 3 4 5 6 7 8 Total Percent Mean Rank Mean Rank

Govt. Storage

Program

Other Farm

Programs

Farm Crisis

Interest Rate

Unit Train

Introduction

Mergers

Rail Abandonment

Other

Total

41

4

4

2

6

69

14

12

9

12

5

8

1

7

68

5 4

13 11

12 9

16 10

10 4

3 9

2 4

0 0

61 51

2 0 1 0 67

5 3 2 0 52

9 2 0 0 45

10 3 4 0 57

5 9 7 0 44

7 9 7 1 48

1 8 11 5 34

1 0 0 1 15

40 34 22 7

(94) 1.75

(73) 3.72

(63) 3.36

(80) 3.68

(62) 4.27

(68) 4.40

(48) 5.76

(23) 2.56

(1) 1.76 (1)

(2) 2.85 (2)

(3) 3.69 (4)

(4) 3.46 (3)

(5)

(6)

(7)

(8)

3.91 (5)

5.29 (6)

5.53 (7)

on what factors affected elevator operilti0ns, managerial strategies tried, degree of success, and their importance in keeping the cooperative elevator viable. A

companion report analyzes the structural and operational changes since 1988. (See Response of

Cooperative Elevators to Changes in Government

Policies, RBS Research Report 153.)

Classification Scheme

In 1988, participating cooperatives were classified

by production region, progressiveness, and size.

Cooperatives were sorted into three production

regions b;lsecl on the primary commodity produced in

the area-spring wheat (23 elevators), corn (26 elevators), and winter wheat (22 elevators). The cooperntives were located in Iowa (ll), Kansas (13), Minnesota

(lh), Nebraska (4), North Dakota (lx), Oklahoma (X),

and South Dakota (6).

The progressiveness of a cooperative was judged

by its financial strength and innovative techniques.

Return on equity, return on assets, percent of noncash

grain purchases in 1991, and Government grain purchases from the cooperative by others were factors in

determining financial strength. Innovative techniques

included the use of a FAX machine, a computerized

accounting system, and maintaining the quality of

stored grain. There were 25 progressive, 29 intermediate, and 17 conservative elevators.

Cooperatives in each production region were further classified by size based on elevator storage capacity-small (21), medium-size (24), and large (2h)-to

eliminate size-production intercorrelation. All cooperatives were kept in the same classification grouping for

sake of comparison.

Selected Developments

In 1988, managers ranked seven factors as to their

effect on elevator operations-Government storage

programs, other farm programs, farm crisis, interest

rate, introduction of unit trains, mergers, and rail line

abandonment. In 1992, an “other factors” category was

added to accommodate factors that some managers

found to have a greater effect than those provided in

the earlier study-weather, competition, rail car availability, addition of rail loadout facilities, farmer attitudes, decreased margins, and poor crop.

Responses were scored by assigning a value to

each factor. The most important factor was assigned 1,

the second was assigned 2, etc. Each factor’s total score
T&I~ s Average ranking scores (l=most, 7=least) of specified factors as to operational impact and

differences from 1988 to 1992 by managers of 71 grain marketing cooperatives a

Group

Govt. storage programs

1992 1988 Diff

Other farm programs

-_

1992 1900 Diff

Farm crisis Interest rate

1992 1988 Drff 1992 1988 Diff

All

Production region

Spring Wheat

Corn

Winter Wheat

Progressiveness

Progressive

Intermediate

Conservative

Size (storage capacity)

Small

Medium

Large

1.75 1.76 -0.01 3.26 2.85 0.42 3.36 3.69 -0.33 3.68 3.46 0.22

1.77 1.41 0.36 3.75 3.31 w 0.43 3.80 4.40 w -0.60 3.64 3.76 -0.12

1.87 2.09 -0.22 3.43 3.00 0.43 3.29 3.88 w -0.59 3.18 3.32 -0.14

1.59 1.77 -0.18 2.53 2.13 s 0.40 2.92 2.62 S C 0.30 4.33 3.33 1.00

1.61 1.82 -0.21 3.33 2.78 0.55 2.80 4.07 -1.27’ 3.71 4.10 -0.38

1.86 2.07 c -0.21 3.18 2.91 0.27 3.67 2.57 0.10 3.78 2.95 0.82

1.75 1.12 i 0.63 3.33 2.83 0.50 3.55 3.33 0.22 3.50 3.29 0.21

2.28 m 1.81 0.47 3.47 2.27 1 .oo* 3.20 3.53 -0.33 3.37 3.11 0.26

1.36s 1.59 -0.23 3.26 3.05 0.21 3.17 3.70 -0.53 4.05 3.21 0.84

1.63 1.88 0.25 3.11 2.94 0.17 3.77 3.85 -0.08 3.63 4.05 -0.42

B Statistical significance between groups in a particular category is indicated by the first letter of the other group to which a specific group is

compared. A .05 percent level of sigmficance is used.

* Represents a .05 percent level of significance for differences between the two years.

gable 3 (continued)- Average ranking scores (l=most, 74east) of specified factors as to operational impact and

differences from 1988 to 1992 by managers of 71 grain marketing cooperatives

Group

Intro. of unit trains

1992 1988 Diff

Mergers Rail abandonment Other a

___

1992 1988 Diff 1992 1988 Diff 1992 1988 Diff

All

Production region

Spring Wheat

Corn

Winter Wheat

Progressiveness

Progressive

Intermediate

Conservative

Size (storage capacity)

Small

Medium

Large

4.27 3.91 0.36 4.39 5.29 -0.90’ 5.76 5.53 0.23 2.56

3.89 3.21 0.68 4.00 5.60 -1.60’ 5.09 6.00 -0.91 4.20

4.43 4.43 0.00 4.94 5.38 -0.44 6.00 5.00 1 .oo 1 .oo

4.73 4.45 0.27 4.24 4.94 -0.70 6.20 5.70 0.50 2.12

3.93

4.44

4.45

4.35

4.40

4.00

3.60 0.33 4.50 5.11 -0.61 6.18 5.55 0.63 3.00

4.22 0.22 4.68 5.84 -1.16 5.56 5.62 -0.06 2.86

3.82 0.63 3.73 4.63 -0.90 5.57 5.29 0.28 1.50

4.12 0.23 5.24 5.41 -0.17 5.73 5.27 0.46 1.25

3.67 0.73 4.40 5.73 -1.33’ 5.92 5.75 0.17 3.67

3.92 0.08 3.50 4.75 -1.25 5.57 5.71 -0.14 2.78

a Other was not presented as a factor in 1988.

* Represents a .05 percent level of statistical significance for differences between the two years.

3
was then cliviclecl by the number of managers ranking

the factor. Thr smaller the number, the greater the

effect on elevator operations. Factors that hacl no effect

were not ranked. Table 2 presents the lYY2 rankings of

the eight factors. (Also see group ranking tables in

appendix A.)

Ranking Impacts

Reciucecl Government storage payments hacl the

greatest effect on elevator operations, rankeci highest by

41 of the 71 respondents anti seconcl highest by 14 others. It was also ranked highest in 1988, and there was

virtually no change between 1988 ancl lYY2 (table 3).

Using the tables, readers can compare groups in

each classification category. In table 3, for example, the

effect of “other farm programs” in the spring wheat

production area can be compared with those in the

winter wheat pmduction area. Any statistically significant clifference between two groups is cienotecl by the

first letter of the other group with which a specific

group is compared.

Thus, in table 3, other farm programs in the

spring wheat procluction area is statistically ciifferent

from the winter wheat pn’duction area. This is measured at the 0.05 level of siqificance. When clifferences between lYH8 anti lYY2 are presentecl, an asterisk

(*) inclicates it is statistically significant at the 0.05

level. In table 3, the change in the effect of the “farm

crisis” between 1988 and lYY2 on progressive cooperatives was statistically sipificant.

Other farm programs rankecl 2ncl with a score of

3.26 just as in IYXX but up 0.42 points. Thus, managers

believed the effects of the Government programs were

greater in lY8X. Managers also reporteci clecreasecl use

of CCC catalog and auction sales in the early 1YYOs.

The farm crisis (3.36) ancl interest rate (3.68)

ranked 3rd anti 4th, respectively, a switch from 1988.

This was due mainly to a lower interest rate in the

early 1990s when the inclustry increased investment in

marketing infrastructure (Dahl). Lower rates also

helped cooperative elevators carrying heavy debt from

the 1970s devote more capital for operations

(Warman).

In both 1988 and lYY2, managers ranked the

introduction of unit trains 5th (4.27). However, the

increased score from 1988 indicates a slightly smaller

impact in 1992. The managers felt that the effect from

the introduction of unit trains had worked its way

through the industry, particularly in the spring wheat

area where they were introduced at a later date. Rail

loaclout capacity also increased between 1988 and

lYY2, but most of it occurred closer to 1988.

While mergers ranked 6th in both surveys, it was

the only factor to show a significantly increased

impact from 1988 to 1992. Ten of the 71 responding

cooperatives were involved in mergers between 198X

and lYY2 (Stearns, Cobia, Warman). This indicates that

the consoliclation of cooperative country elevators continued ancl affectecl elevator operations. Rail abandonment ranked 7th (5.76) in importance in both studies,

but most of it occurred earlier.

The “other factors” category, adcied in the 1992

study, was rankecl relatively high, with a score of 2.56.

These inclucied the availability of rail cars, drought,

ancl increased competition. However, only 15 managers ranked the other factors compared with 67 ranking Government storage and 34 ranking rail abandonment. Six of the 15 ranked this factor first and seven

rankecl it 2nd. Given the low total number of managers

Tabled-Average ranking of factors affecting elevator operations of individual groups by managers, 1992

Spring Winter Progres- Inter- ConserFactor All Wheat Corn Wheat sive mediate vative Small Medium Large

Govt. Storage Program 1 1 1 1 1 1 1 1 1 1

Other Farm Programs 2 3 4 2 3 2 2 4 3 2

Farm Crisis 3 4 3 3 2 3 3 2 2 5

Interest Rate 4 2 2 5 4 4 4 3 4 4

Unit Trains Introduction 5 5 5 6 5 5 6 5 5 6

Mergers 6 6 6 4 6 6 5 6 6 3

Rail Abandonment 7 7 7 7 7 7 7 7 7 7

Other 8 8 8 8 8 8 8 8 8 8

4
ranking this factor, it is assumed other factors did not

have a great effect. For the purpose of this study, other

factors is ranked last.

Differences Among Groups

Table 4 summarizes the average rankings of those

factors managers believed affected elevator operations.

Reduced Government storage payments ranks 1st for

all nine groups while rail abandonment ranks 7th.

Production region

Even considered by production areas, reduced

Government storage payments ranked 1st in effect on

cooperative elevators (tables 3 and 4). Spring wheat

area managers indicated the effects decreased between

1988 and 1992, but increased in winter wheat and corn

production areas.

Spring wheat and corn area managers ranked

interest rates 2nd, up from 4th in 1988. These cooperatives showed higher debt/asset ratios than in the winter wheat production area (Stearns, Cobia, and

Warman). The effect of the farm crisis increased in

spring wheat and corn areas compared with a decrease

in winter wheat areas. This correlates with the number

of farm bankruptcy filings, which were nearly three

times higher in the Northern Plains and Corn Belt

regions than in the winter wheat areas.

Winter wheat area managers ranked the impact

of mergers 4th, compared with a 6th place ranking in

the other production areas. These managers also

reported increased competition from elevators that

merged with or were acquired by other firms. There

was a sihmificant difference in the ranking score for

mergers in the spring wheat production area. Six

mangers ranked mergers 1st and 2nd in order of

importance, indicating more merger activity than in

1988.

Rail abandonment was ranked last by managers

in all areas although two corn area managers ranked it

1st and 2nd. Managers in the winter wheat and corn

production areas felt this factor decreased while spring

wheat area managers felt it increased.

Progressiveness

Government storage programs ranked 1st in each

group of the progressiveness category. Progressive and

intermediate managers felt that the effect was slightly

higher in 1992 while conservative managers believed it

was lower. Progressive managers ranked the farm crisis 2nd, up from 4th in 198X. These cooperatives had

the largest decrease in net income and a sibqificant

decline in return to equity and assets from 1987 to 1991

partially due to the farm crisis (Stearns, Cobia, and

Warman). Progressive managers also felt interest rates

had a greater effect in 1988 than in 1992.

Intermediate managers ranked all factors in the

same order as in the overall sample. The most sihmificant change was the increase in the effect of mergers.

Conservative managers switched ranking order

of farm crisis and interest rate and introduction of unit

trains and mergers. They felt that the impacts of the

farm crisis and mergers were greater than in 1988.

Four conservative managers ranked other factors 1st or

2nd in importance.

Size

When analyzing the cooperatives by size, all

managers ranked Government storage payment reduction 1st. The score for small elevators was significantly

lower than for medium-sized cooperatives. Although

the effect of storage payments ranked lst, the managers of small cooperatives felt it was less in 1992 than

in 1988. They ranked the impact from the farm crisis

2nd, up from 5th in 1988 and other farm programs 4th,

down from 2nd in 1988.

The farm crisis, farmers leaving the farm and

bankruptcies, had a greater effect on small and medium-size cooperatives than on larger ones that were

more able to remain competitive. Managers of four

small cooperatives ranked other factors as 1st or

2nd-rail car availability, rail loadout capacity,

drought, and small margins.

Managers of medium-size elevators ranked the

farm crisis 2nd, up from 5th in 1988. Medium-size elevators’ ranking score for impacts from mergers was

significantly lower (e.g., a higher impact) than in 1988.

Although only 9 percent of the medium-size elevators

were involved in mergers themselves, mergers by

competitors affected them.

Management Strategies

Managers of grain marketing cooperatives adopted different strategies to compensate for reduced

Government storage income and the other eight factors affecting operations. In 1988, the managers were

presented 15 alternatives and were asked to identify

the most practical. Next, they ranked the alternatives

in the order of having the most income-producing

potential (Gunn and Cobia). In 1992,managers identified successful alternatives they had tried and ranked

them according to their degree vf success.

5
The 15 alternatives were change merchandising

practices, decrease costs through better labor use,

attract new patrons, decrease transportation costs,

merge or acquire additional facilities, increase margins, add or drop marketing services, find additional

sources of revenue, change blending and cleaning

practices, change discount and premium practices,

change the internal structure of the cooperative, handle new crops, eliminate product lines, control general

costs, and close facilities.

In 1988, the authors felt that some responses were

unrealistic because of the competitive environment,

and that others were incompatible (Gunn and Cobia).

For example, YO percent of the managers felt that

attracting new patrons was the most practical alternative to pursue. Competitive pressure from excess

capacity and declining numbers of farmers made this

impossible for YO percent of the elevators to achieve

simultaneously. In addition, more than 50 percent of

the managers felt that it was more practical to increase

income by increasing margins. In reality, excess capacity in unit-train shipping facilities and increased competition for grain squeezed merchandising margins

(Dahl).

Managers were asked to rank the alternatives

they have tried, with the most successful ranked one,

etc. Each alternative’s total score was then divided by

the number of managers ranking that alternative. The

smaller the index number, the greater the perception of

success by the managers.

Attracting new patrons, changing merchandising

practices, and more efficient use of labor were the top

three ranked management strategies in both 1988 and

lY92 (table 5). However, changing merchandising practices was considered most successful, while labor use

and attracting new patrons ranked 2nd and 3rd,

respectively, in 1992, a change from 1988. Fifty-eight of

the managers (85 percent) changed merchandising

practices. This was successful 97 percent of the time.

The change in ranking score for labor use

improved significantly from 1988 as managers transferred personnel from elevator tasks to other activities

depending upon the flow of business. These strategies

were successful in more than 70 percent of the cooperatives.

The remaining strategies sort into two groups.

The first group has a 30 percent to 50 percent success

rate--decreasing transportation costs, mergers and

acquisitions, increasing margins, adding marketing

services, other alternatives for increasing revenue,

changing blending and cleaning practices, and changing discounts and premiums.

Decreasing costs through rail and transportation

ranked 4th in 1992, up significantly from its 10th ranking in 1988. This reflects the importance of controlling

transportation costs in grain marketing to offset

decreasing margins. Also, the Staggers Act (1980)

deregulated rates, allowing railroads and grain handlers to negotiate their rates (Warman).

Boosting revenue by increasing margins was considered contradictory by Gunn and Cobia in the previous study. Of the 75 percent of the managers trying to

increase margins, 53 percent were successful. But,

managers said increased competition made it very difficult to maintain any hike in margins.

The least successful group of management strategies in terms of overall success were considered very

successful by those managers who implemented them.

For example, other cost-reducing practices ranked 6th

in 1988, but dropped to 14th in 1992. However, all nine

managers who tried this said it was successful.

Decreasing advertising, controlling expenses, coordinating deliveries, reducing debt and inventory, and

offering shorter weekend hours were among the strategies.

Production Region

Different management strategies for different

production regions should be expected because of differences in agronomic practices, crops raised, and marketing strategies for different crops. In the spring

wheat area, changing merchandising practices ranked

as the most successful management strategy (appendix

tables Bl-B3). Attracting new patrons ranked 2nd and

more efficient use of labor ranked 3rd.

Spring wheat managers ranked other practices to

increase revenue 4th, up from 7th in 1988. This compares with a 7th and 12th place ranking for corn and

winter wheat areas, respectively. Some practices used

to increase revenue were adding fertilizer and chemical application, increasing trade area, increasing services to patrons, providing facilities for cleaning certified seed, planning strategies, advertising, selling bulk

feed, and adding new enterprises.

In the corn production area, the top three strategies were the same as the entire group. Merger/acquisition ranked 4th. Most of the corn managers perceived mergers/acquisitions as a successful strategy

(93 percent). They also considered adding or dropping

marketing services, increasing revenue, changing management structure, and decreasing other costly practices as successful management strategie. Decreasing

transportation costs and a change in management

structure both improved from 1988.

h
TW s-frequency distribution of rankings of management strategies attempted, index, and differences in indices from 1988 to 1992 by managers

of 71 selected grain marketing cooperatives

Index frequency distnbution of rankmgs Tnedo Successful

Percent of

Strategy

toti

a 1992 1988 Diff 1 2 3 4 5 6 7 8 9 lo # % # %

Merch Pratt 4.21

Labor 4.87

New Patron 5.35

Trans Cost 6.84

MergelAcq 6.93

Margins 7.32

MktgServ 7.48

lncr Revenue 7.58

Blend/Clean 7.76

DisciPrem a.20

Chg Mgmt 8.89

New Crops 9.00

Elim Prod 9.15

Deer Costs 9.22

Close Plant 9.49

(1) 4.39

(2) 6.18

(3) 3.55

(4) 9.05

(5) 8.61

(6) 6.50

(7) 7.99

(a) 7.82

(9) 9.15

(10) a.73

(11) 10.41

(12) 9.27

(13) 10.27

(14) 7.92

(15) 10.15

(2) -0.18

(3) -1.29'

(1) 1.80

(10) -2.21'

(a) -1.68

(4) 0.82

(7) -0.51

(5) -0.24

(11) -1.39

(9) -0.53

(15) -1.50'

(12) -0.27

(14) -1.12

(6) 1.30

(13) -0.66

17 9 6 12 9 i 10 1 0 58 85.3 56 96.6 82.4

11 16 4 7 7 2 2 0 0 0 53 77.9 49 92.5 72.1

3 10 7 13 a 4 3 2 0 0 58 85.3 50 86.2 73.5

4 7 a a 12 3 0 0 0 37 54.4 33 89.2 48.5

lo 4 3 6 I 0 0 i 0 0 28 41.2 25 89.3 36.8

7 4 5 3 3 3 0 11 0 51 75.0 27 52.9 39.7

3 5 7 1 IO 5 3 2 0 0 38 55.9 36 94.7 52.9

6 5 5 2 2 1 0 11 0 23 33.8 23 100.0 33.8

1 2 9 3 2 2 110 0 22 32.4 21 95.5 30.9

1 17 2 7 3 0 0 1 0 30 44.1 22 73.3 32.3

2 10 2 13 2 0 0 0 11 16.2 11 100.0 16.2

10 2 3 12 10 2 0 19 27.9 12 63.2 17.6

0 10 1 0 4 2 10 1 14 20.6 10 71.4 14.7

0 12 1 140000 9 13.4 9 100.0 13.4

2 11 1 010000 7 10.3 6 85.7 a.8

Total 68 67 66 65 53 37 la 9 6 1

Merch Pratt = Change merchandising practices; Labor = Decrease costs through better labor utilrzatton; New Patron = Attracting new patrons; Trans Cost = Lowenng transportatron costs;

MergeiAcq = Merger or acqursitron; Margins = Increase margins; Mktg Serv = Adding or dropping marketing services: lncr Revenue = Increase revenue; Blend/Clean = Change blendrng and

cleaning practices; DisciPrem = Change discounts and premiums; Chg Mgmt = Change internal cooperative structure; New Crops = Handle new types of crops: Elim Prod = Eliminate

product line: Deer Costs = Decrease costs: Close Plant = Decrease costs through plant closing.

Percent of managers selecting specified strategy.

Represents a ,055 percent level of significance for differences between the two years.
M<>ndgers for the winter wheat dred ranked more

efficlrnt use of labor as the most successful management strategy (3rd in 1988). Attracting new patrons

ranked 3rc1, with a significantly lower index score than

in the first study. Mergers and acquisitions, although

not changing relative rankings, were considered successful (7X percent) by those who tried them.

Progressiveness

There were major differences between groups in

the progressiveness category. Managers of progressive

cooperatives ranked changing merchandising practices

lst, but mergers and acquisitions 2nd (appendix tables

B-4 to B-6). This compares with 10th and 7th for intermediate and conservative managers, respectively. All

managers found these strategies successful.

Conservative managers ranked fewer strategies

than intermediate and progressive managers. It also

appears conservative managers were unable to implement many of the changes they thought practical. This

may have been because they were less aggressive than

others in seeking alternatives. Due to the smaller size

of conservative cooperatives, their managers had less

flexibility in trying new strategies.

More efficient use of labor was the most successful strategy tried by the conservative managers (4th in

198X). Increasing margins dropped from 3rd to 6th.

Managers of conservative cooperatives said they were

successful in increasing margins only 37.5 percent of

the time. Although mergers/acquisitions were ranked

7th, X3 percent of the conservative managers who tried

them reported success.

Size

The size of a cooperatives may affect the strategies that dre available to managers and their ability to

implement them. In large cooperatives, changing merchandising practices, using labor efficiently, and

adding new patrons were considered successful strategies by more than X3 percent of the managers (<3ppendix tables B-7 to B-Y). Decreasing transportation costs

moved from Yth to 4th. Nine managers of Iarger cooperatives felt merger/acquisitions were successful. The

importance of changing blending and cleaning practices moved to 7th from 13th, reflecting success by all

managers who attempted to compete more aggressively in grain merchandising.

Medium-sized elevator managers ranked changing merchandising practices 1st in success and labor

us<~ge 2nd in lYY2 (5th in lYX8). Attracting new

patrons, considered most practical by medium-sized

elevator managers, dropped to 3rd as a successfuI

strategy. These managers ranked increasing margins

3rd in practicality in IYHH, but only 10th in 1992. All 17

managers, who added or reduced marketing services,

found that a worthwhile strateb,y.

In attempting to recoup losses from reduced

Government storage payments, small elevators adopted cost-cutting strategies to become more competitive

with larger elevators. Many small elevators made more

efficient use of Iabor and Attempted to attract new

patrons. Small elevators also changed merchandising

practices (3rd from 2nd), cut transportation costs (4th

from 13th), and added marketing services (5th from

8th). Merger/acquisitions were successful in 7 of Y

small cooperatives.

Summary and Implications

Today’s cooperative grain marketing system faces

a number of challenges because of changes in the system during the late IYXOs and early 1990s. Shifts in

farm policies forced grain marketers to respond to

market signals rather than Government programs.

This report examined those factors that forced cooperatives to change operating practices and reexamines

management strategies that cooperatives implemented

and the success of these strategies.

This was d followup to a 1988 study. Seventy-one

of the 87 managers from the 198% study responded.

The cooperatives were Iocdted in seven States which

covered the Corn Belt, hard red spring wheat, and

hard red winter wheat production areas. Responses

were cl‘lssified by production area, the cooperative’s

progressiveness, and its size.

As in lY88, reduced Government storage payment was ranked 1st among factors affecting cooperatives. Other farm programs was ranked 2nd and the

farm crisis was a close 3rd. The score for other farm

programs increased (less effect) from the first study.

Cooperative managers believed the effect of the farm

crisis was greater in 1992 than in 1988. Factors such as

interest rates, introduction of unit trains, mergers, and

rail abandonment were ranked the same as in lY88.

In 19X8, m‘inagers ranked 15 management strategies based on their practicality. In this study, managers

identified strategies they tried and then ranked them

according to their levels of success.

The top three management strategies in 1992

were changing merchandising practices, using labor

more efficiently, and attracting new patrons. Eightyx
trvt‘ percent (58) of the managers successfully changed

merchandising practices. The top three in 1988 were

attracting new patrons, changing merchandising practices, and more efficient utilization of labor.

The remaining strategies fall into two categories-30 to SO percent success rate and least successful. However, managers who implemented these

strategies considered them very successful.

This study illustrates two points. First, the key

element for the success of cooperative grain elevators

is the development of good merchandising skills and

practices. This confirms earlier research. Grain marketing cooperatives must continue to improve in the management area.

Second, labor costs run between 35 and 4S percent of a cooperative elevator’s operating cost, the

biggest expense. To achieve maximum productivity of

labor, managers moved employees to do other jobs

during slack periods.

Managers can attract new patrons through the

prices charged and added services. However, not all

cooperative elevators can implement these changes at

the same time. Some cooperatives gained new patrons

from mergers and the addition of facilities. Managers

also noted that producers increasingly shop for the

best prices and services and patronize a number of eleva tors.

As a final note, all 15 of the suggested management strategies were tried. Every alternative was successful for at least 6 of the 71 managers. This suggests

that any individual cooperative elevator should evaluate each alternative to determine its applicability.

Restructuring and downsizing will continue in the

industry, but each cooperative has a variety of management strategies available to help it survive.

References

Glow, Bradley B. and William W. Wilson, Financinl

Operating Pcrfornm7ce of Cooperative Unit-Tmin

Shippers in North Dakofa, Ag. Econ. Report 234,

Dept. of Ag. Econ., North Dakota State University,

March 1988.

Cobia, David W. and Randal C. Coon, Pricing Systcrrrs

of Trainloading Comtry Eltwtor Cooperatives: A

Summary, Ag. Econ. Report 21.5, Dept. of Ag. Icon.,

North Dakota State University, December 1986.

Dahl, Reynold P, “Structural Change and Performance

of Grain Marketing Cooperatives,” ]orrrrrnl of

Agricultrrral Cooperation, Volume 6, 1991.

Gunn, Steven I? and David W. Cobia, Grain MarkrtiuX

Cooperatives’ Adjustment to Farm Prqgmn~s, Ag.

Econ. Report 291, Dept of Ag. Econ., North Dakota

State University and USDA, Agricultural

Cooperative Service, September 1992.

Olson, Ron., Atwood-Larson Company, personal communications, March 1993.

Robert Morris Associates, annual statements studies,

The National Association of Rank Loan and Credit

Officers, 1992.

Scherping, Daniel J. and others, Wheat ClcaninR Costs

and Grain Merchandising, Ag. Econ. Report 282,

Dept. of Ag. Econ., North Dakota State University,

February 1992.

Seigel, Sidney. Noupramefric Stafisfics for the Rehn7%1ytll

Sciences, The Maple Press, York, Pennsylvania,

1956.

Stearns, Larry, David W. Cobia, Marc Warman,

Response of Cooperative Elevators fo Changes in

Government Policies, RBS Research Report 153,

USDA, Rural Business-Cooperative Service, July

1997.

Warman, Marc, Cooperative Grain Markefing: Changes,

Issues, and Alternatives, ACS Research Report 123,

USDA, Agricultural Cooperative Service, April

1994.

Wilson, William W., North Dakota State University,

personal communications, 1993.
‘,il~d+‘liill* ! ,111lt 2% I Frequency distribution of factors affecting financial status of cooperatives

by managers of 23 spring wheat cooperatives, 1992

Frequency ranking

-__ Total Percent Mean Rank

Factor 1 2 3 4 5 6 7 8

Govt. Storage Program 12 6 2 1 1

Other Farm Programs 2 2 2 6 1

Farm Crlsls 1 2 4 1 6

Interest Rate 1 5 3 2 3

Unit Trains lntroductlon I 3 7 2 1

Mergers 4 2 0 2 1

Rail Abandonment 1 0 2 2 1

Other 1 2 0 0 0

0 0 22 (96) 1.77 (1)

1 0 16 (70) 3.75 (2)

0 0 15 (65) 3.80 (3)

1 0 17 (74) 3.64 (4)

3 0 19 (83) 3.89 (5)

3 0 15 (65) 4.00 (6)

2 2 11 (48) 5.09 (7)

0 2 5 (22) 4.20 (8)

Total 22 22 20 16 14 11 10 4

Appendix Table ~2- Frequency distribution of factors affecting financial status of cooperatives by managers

of 26 corn cooperatives, 1992

Frequency ranktng

Total Percent Mean Rank

Factor 1 2 3 4 5 6 7 8

Govt. Storage Program 14 5 1 1 1 0 1 0 23 (88) 1.87 (1)

Other Farm Programs 2 3 7 5 2 1 1 0 21 (81) 3.43 (4)

Farm Crisis 1 4 4 5 3 0 0 0 17 (65) 3.29 (3)

Interest Rate 1 5 8 5 3 0 0 0 22 (85) 3.18 (2)

Unit Trains Introduction 2 2 1 0 3 4 2 0 14 (54) 4.43 (5)

Mergers 0 4 0 2 2 4 3 1 16 (62) 4.94 (6)

Rail Abandonment 1 1 0 0 0 4 5 2 13 (5) 6.00 (7)

Other 3 0 0 0 0 0 0 0 3 (12) 1.00 (8)

Total 25 24 21 18 14 13 12 3

Appendix Table ~3- Frequency distribution of factors affecting financial status of cooperatives

by managers of 22 winter wheat cooperatives, 1992

Frequency ranktng

Total Percent Mean Rank

Factor 1 2 3 4 5 6 7 8

Govt. Storage Program 15 3

Other Farm Programs 2 7

Farm Crisis 2 3

Interest Rate 0 2

Unit Trains Introduction 1 0

Mergers 0 2

Rail Abandonment 0 0

Other 2 5

0 0 22 (100) 1.59 (1)

0 0 15 (68) 2.53 (2)

0 0 13 (54) 2.92 (3)

3 0 18 (82) 4.33 (5)

2 0 11 (50) 4.73 (6)

1 0 17 (77) 4.24 (4)

4 1 10 (45) 6.20 (7)

0 0 8 (36) 2.12 (8)

Total 22 22 20 17 12 10 10 1
Appendix Table ~4- Frequency distribution of factors affecting financial StatUS of COOperatiVeS

by managers of 25 progressive grain marketing cooperatives, 1992

Factor

Frequency ranking

Total Percent Mean Rank

1 2 3 4 5 6 7 8

Govt. Storage Program

Other Farm Programs

Farm Crisis

Interest Rate

Unit Trains Introduction

Mergers

Rail Abandonment

Other

14

3

2

1

1

1

1

1

1 0

1 1

2 0

0 0

1 3

3 3

0 4

0 0

0 23 (92) 1.61 (1)

0 18 (72) 3.33 (3)

0 15 (60) 2.80 (2)

0 21 (84) 3.71 (4)

0 15 (60) 3.93 (5)

1 18 (72) 4.50 (6)

1 11 (44) 6.18 (7)

1 5 (20) 3.00 (8)

Total 24 24 24 16 8 11 11 3

Appendix Table ~5-- Frequency distribution Of factors affecting financial StatUS Of Cooperatives

by managers of 28 intermediate grain marketing cooperatives, 1992

Factor

Frequency ranking

Total Percent Mean Rank

1 2 3 4 5 6 7 8

Govt. Storage Program 18 4 2 2 1 0

Other Farm Programs 3 5 6 3 3 2

Farm Crisis 1 3 5 6 5 1

Interest Rate 0 7 4 4 3 2

Unit Trains Introduction 1 2 3 1 4 3

Mergers 1 3 1 3 2 6

Rail Abandonment 1 1 1 3 0 2

Other 3 2 0 0 1 0

0 28 (100) 1.86 (1)

0 22 (88) 3.18 (2)

0 21 (75) 3.67 (3)

0 22 (88) 3.72 (4)

0 18 (64) 4.44 (5)

0 19 (68) 4.68 (6)

3 16 (57) 5.56 (7)

1 7 (28) 2.86 (8)

Total 28 27 22 22 19 16 14 4

Appendix Table ~6-- Frequency distribution Of factors affecting financial StatUS Of Cooperatives

by managers of 17 conservative cooperatives, 1992

Factor

Frequency ranking

Total Percent Mean Rank

1 2 3 4 5 6 7 8

Govt. Storage Pogram 9 4 1 2 0 0 0 0 16 (94) 1.75 (1)

Other Farm Programs 0 3 3 5 1 0 0 0 12 (71) 3.33 (2)

Farm Crisis 1 2 1 2 2 1 0 0 9 (53) 3.56 (3)

Interest Rate 1 3 5 1 2 1 1 0 14 (82) 3.50 (4)

Unit Trains Introduction 2 1 2 0 0 3 3 0 11 (65) 4.45 (6)

Mergers 2 2 1 2 2 0 2 0 11 (65) 3.72 (5)

Rail Abandonment 0 0 1 1 1 2 1 1 7 (41) 5.57 (7)

Other 2 2 0 0 0 0 0 0 4 (24) 1.50 (8)

Total 17 17 14 13 8 7 7 1

11
Appendix Table AT- Frequency distribution of factors affecting financial status of cooperatives

by managers of 21 small (storage capacity) cooperatives, 1992

Factor

Frequency ranking

Total Percent Mean Rank

1 2 3 4 5 6 7 8

Govt. Storage Pogram 10 4 3

Other Farm Programs 3 3 2

Farm Crisis 2 3 3

Interest Rate 1 7 4

Unit Trains introduction 0 2 5

Mergers 1 0 1

Rail Abandonment 1 0 1

Other 3 1 0

2 0

2 2

1 1

3 0

2 5

3 3

0 3

0 0

0 21 (100) 2.29 (1)

1 15 (71) 3.47 (4)

0 15 (71) 3.20 (2)

0 19 (90) 3.37 (3)

0 17 (81) 4.35 (5)

1 17 (81) 5.24 (6)

2 15 (71) 4.73 (7)

0 4 (19) 1.25 (8)

Total 21 20 19 18 13 14 15 4

Appendix Table A+ Frequency distribution of factors affecting financial status of cooperatives

by managers of 24 medium (storage capacity) cooperatives, 1992

Factor

Frequency ranking

Total Percent Mean Rank

1 2 3 4 5 6 7 8

Govt. Storage Pogram 15 6

Other Farm Programs 1 5

Farm Crisis 2 4

Interest Rate 0 3

Unit Trains Introduction 3 0

Mergers 1 3

Rail Abandonment 0 1

Other 1 1

0 0

5 0

3 4

4 5

0 2

2 2

1 0

0 0

0 0 0

1 1 0

0 0 0

3 0 0

2 4 0

4 2 0

3 4 2

0 0 1

22 (92) 1.36 (1)

19 (79) 3.26 (3)

17 (71) 3.18 (2)

19 (79) 4.05 (4)

15 (63) 4.40 (5)

15 (63) 4.40 (5)

12 (50) 5.92 (7)

3 (13) 3.67 (8)

Total 23 23 20 15 13 13 11 3

Appendix Table AS- Frequency distribution Of factors affecting financial StatUS Of COOperatiVeS

by managers of 26 large (storage capacity) cooperatives, 1992

Factor

Frequency ranking

Total Percent Mean Rank

1 2 3 4 5 6 7 8

Govt. Storage Pogram 14

Other Farm Programs 3

Farm Crisis 0

Interest Rate 1

Unit Trains Introduction 1

Mergers 2

Rail Abandonment 1

Other 2

1 3 0 0

5 4 3 0

5 1 4 1

8 4 2 2

2 1 1 2

1 3 2 2

0 1 0 2

0 0 1 0

0 24 (92) 1.63 (1)

0 18 (69) 3.11 (2)

0 13 (50) 3.77 (5)

0 19 (73) 3.63 (4)

0 12 (46) 4.00 (6)

0 16 (62) 3.50 (3)

1 7 (27) 5.56 (7)

1 9 (35) 2.78 (8)

Total 26 24 22 17 13 9 5 2

12
Appendix Table al-- Frequency distribution of rankings of management strategies attempted, index, and differences in indices from 1988

to 1992 by managers of 23 spring wheat grain marketing cooperatives

___

Index Frequency dlstnbutlon of rankings Tned t Successful

_ _____.__._ Percen! ‘

Strategy 1 1992 1988 Dlff 1 2 3 4 5 6 7 8 9 10 # % # O0

Merch Pratt

Labor

New Patron

Trans Cost

MergeiAcq

Margins

Mktg Serv

lncr Revenue

Blend/Clean

Dlsc/Prem

Chg Mgmt

New Crops

Elim Prod

Deer Costs

Close Plant

4.80 (1) 6.56

6.15 (3) 5.93

5.22 (2) 3.61

6.41 (5) 9.24

7.26 (8) 10.37

6.83 (7) 3.87

7.83 19) 8.50

6.24 (4) 8 02

6.46 (6) 9.32

8.16 (10) 8.17

8.63 i12) 10.32

8.43 (11) 7.52

8.91 (14) 11.19

8.60 (13) 6.67

8.98 (15) 10.59

(4) -1.76 5 4 0 5 2 0 101 0 1 86.4 18 94.7

(3) 0.21 2 4 1 1401000 15 60.2 13 86.7

(1) 1.60' 0 2 3 5 3 1 2 0 0 0 19 86.4 16 E!42

(10) -2.83' 2 3 2 4 0 0 0 0 0 0 12 54.6 il 91.7

(13) -3.il' 3 0 1 11 0 0 0 0 0 6 273 6 100.0

(2) 2.95' 3 2 2 3 0 2 0 0 0 0 19 86.4 9 47 4

(9) -0.76 1 2 3 0 4 2 0 1 0 0 14 63.6 13 92.9

(7) -1.78 4 2 2 0 1 0 0 10 0 10 45.4 10 100 0

(111 -2.86' 0 2 3 2 10 110 0 10 45.4 10 1 oc;.o

(8) .o 04 0 14 1 1 0 0 0 1 0 1 1 50.0 8 72.7

(12) -1 69 1 000101000 3 13 6 3 100.0

(6) 0.91 0 0 1 2 0 2 0 01 0 7 31.8 6 857

(15) -2.28' 0 0 0 0 0 1 11 0 0 4 18.2 3 75.0

(5) 2.13 0 0 0 0 0 3 0 0 0 0 3 13.6 3 1000

(14) -1.61' 1 0 0 1 0 1 0 0 0 0 3 13.6 3 1000

Total 22 22 22 22 18 12 7 4 3 0

a Merch Pratt = Change merchandlslng practices Labor = Decrease costs through better labor utlllzatlon New Patron = Attracting new patrons, Trans Cost = Lowenng transportatior; ,:os!\

Merge,‘Acq = Merger or acqulsltlon. Margins = Increase margins, Mktg Serv = Addlng or droppmg marketing ser\llces. lncr Revenue = Increase revenue, Blend/Clean = Change blerlding arid

cleaning practices: Dlsc/Prem = Change discounts and premiums, Chg Mgmt = Change Internal cooperatlve structure New Crops = Handle new types of crops, Ellm Prod = Ellmlnate

product Ilne: Deer Costs = Decrease costs, Close Plant = Decrease costs through plant closing

b Percent of managers selecting speclfled strategy.

* Represents a .05 percent level of stgnificance for differences between the two years.
~p~~~clIx TAM EZ Frequency distribution of rankings of management strategies attempted, index, and differences in ilndices from 1988

to 1992 by managers of 26 corn grain marketing cooperatives

index Frequency drstnbutron of rankrngs

_

Strategy a 1992 1966 Diff 1 2 3 4 5 6 7 0 9

Merch Pratt 3.10 (1) 3.48 (1) -0.38 833431000

Labor 4.46 (2) 6.02 (3) -1.56 362331000

New Patron 4.86 (3) 3.50 (2) 1.36 3 5 1 3 3 1 110

Trans Cost 6.19 (5) 9.12 (9) -2.93' 125311000

MergelAcq 5.98 (4) 7.63 (5) -1.65 522300000

Margins 8.35 (8) 8.00 (8) 0.35 120020000

Mktg Serv 6.27 (6) 7.21 (4) -0.94 0 3 3 14 2 10 0

lncr Revenue 7.46 (7) 7.62 (6) -0.15 203201000

Blend/Clean 8.58 (9) 9.19 (10) -0.61 0 0 3 10 1 0 0 0

Disc/Prem 8.62 (10) 9.48 (11) -0.86 000123000

Chg Mgmt 8.79 (11) 10.44 (15) -1.65' 1 1 0 10 0 10 0

NewCrops 9.52 (13) 10.42 (14) -0.90 000010100

Elim Prod 9.54 (14) 9.83 (12) -0.29 0 0 0 0 0 1 10 0

Deer Costs 9.13 (12) 7.96 (7) 1.17 0 0 1 10 1 0 0 0

Close Plant 9.92 (15) 10.09 (13) -0.17 000000000

_.-

--

10

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Total 24 24 23 23 19 13 5 1 0 0

Tned b Successful

- -__-- ___---- Percent cf

# o/o # c0 tota

_._..__~~----.---~. .~~

22 91.7 22 100.0 91.7

20 83.3 18 90.0 75.0

21 87.5 18 85.7 75.0

14 58.3 13 92.9 54.2

13 54.2 12 92.3 50.0

14 58.3 5 35.7 20.8

14 58.3 14 100.0 58.3

8 33.3 8 100.0 33.3

6 25.0 5 83.3 20.8

9 37.5 6 66.7 25.0

4 16.7 4 100.0 16.7

4 16.7 2 50.0 8.4

3 12.5 2 66.7 8.3

3 12.5 3 100.0 12.5

0 0.0 0 0.0 0.0

a Merch Pratt = Change merchandrsing practices; Labor = Decrease costs through better labor utilrzatton: New Patron = Attractrng new patrons; Trans Cost = Lowering transportatron costs

Merge/Acq = Merger or acquisition; Margtns = Increase margins; Mktg Serv = Adding or dropptng marketing services; lncr Revenue = Increase revenue; Blend/Clean = Change blendtng and

cleanrng practrces; Drsc/Prem = Change discounts and premiums; Chg Mgmt = Change internal cooperatrve structure; New Crops = Handle new types of crops: Elrm Prod = Eliminate

product line; Deer Costs = Decrease costs; Close Plant = Decrease costs through plant closing.

b Percent of managers selecting specified strategy

l Represents a .05 percent level of significance for differences between the two years
Appendix Table 6% Frequency distribution of rankings of management strategies attempted, index, and differences in indices from 1988

to 1992 by managers of 22 winter wheat grain marketing cooperatives

Index Frequency drstnbutron of rankings Tned b Successful

Percent of

Strategy = 1992 1986 Diff 1 2 3 4 5 6 7 a 9 10 # % # % IOti

Merch Pratt

Labor

New Patron

Trans Cost

MergelAcq

Margins

MktgServ

lncr Revenue

Blend/Clean

Disc/Prem

Chg Mgmt

NewCrops

Elim Prod

Deer Costs

Close Plant

4.90 (2) 3.18 (1) 1.73 4 2 3 3 4 0 0 0 0 0 17 77.3 16 94.1 72.2

4.02 (1) 6.61 (3) -2.59' 6 6 1 3 0 1 1 0 0 0 18 81.8 18 100.0 81.8

6.04 (3) 3.57 (2) 2.48' 0 3 3 5 2 2 0 1 0 0 18 81.8 15 83.3 68.1

8.04 (7) 8.77 (9) -0.73 1 2 1 10 1 3 0 0 0 11 50.0 9 81.8 40.9

7.70 (5) 7.91 (5) -0.21 2 2 0 2 0 0 0 1 0 0 9 40.9 7 77.8 31.8

6.61 (4) 7.48 (4) -0.86 3 0 3 3 1 1 0 1 1 0 18 81.8 13 72.2 59.1

8.55 (9) 8.27 (7) 0.27 2 0 1 0 2 1 2 10 0 10 45.5 9 90.0 40.5

9.11 (12) 7.86 (6) 1.25 0 3 0 0 10 0 01 0 5 22.7 5 100.0 22.7

8.16 (8) 8.93 (10) -0.77 1 0 3 0 1 1 0 0 0 0 6 27.3 6 100.0 27.3

7.77 (6) 8.41 (8) -0.64 1 0 3 0 4 0 0 0 0 0 10 45.5 8 80.0 36.4

9.29 (13) 10.45 (15) -1.15 0 0 0 10 3 0 0 0 0 4 18.2 4 100.0 18.2

8.98 (11) 9.75 (12) -0.77 1 0 1 10 0 0 01 0 8 36.4 4 50.0 18.2

8.93 (10) 9.84 (14) -0.91 0 1 0 1020001 7 31.8 5 71.4 22.7

9.77 (15) 9.18 (11) 0.59 0 1 1 0100000 3 14.3 3 100.0 14.3

9.50 (14) 9.77 (13) -0.27 1 1 1 0000000 4 18.2 3 75.0 13.7

Total 22 21 21 20 16 12 6 3 3 1

a Merch Pratt = Change merchandrsrng practices; Labor = Decrease costs through better labor utrlizatron; New Patron = Attracting new patrons; Trans Cost = Lowenng transportatron costs;

MergeiAcq = Merger or acqursition: Margins = Increase margins: Mktg Serv = Addrng or dropping marketing services: lncr Revenue = Increase revenue; Blend/Clean = Change blendrng and

cleaning practices; DisciPrem = Change discounts and premrums; Chg Mgmt = Change internal cooperatrve structure; New Crops = Handle new types of crops; Eirm Prod = Elrmrnate

product line; Deer Costs = Decrease costs; Close Plant = Decrease costs through plant closrng.

b Percent of managers selecting specified strategy.

’ Represents a ,051 percent level of srgnifrcance for differences between the two years.
_. ----

z

:ippenilw I ,it:l” b-4 Frequency distribution of rankings of management strategies attempted. index. and differences in indices from 1988 tu t992 k j

managers of 25 progressive grain marketing cooperatives

Index Frequency dlstnbutjon ot rankings

____ - -

Strategy a 1992 1988 Dlff 1 2 3 4 5 6 7 a 9 10

Merch Pratt 3.62

Labor 5.10

New Patron 5.68

Trans Cost 5.76

MergeiAcq 4.98

Margins 7.52

Mktg Serv 8.62

lncr Revenue 7.10

Blend,Clean 7.30

Dlsc/Prem 8.72

Chg Mgmt 9.46

New Crops 9.04

Ellm Prod 9.14

Deer Costs 9.22

Close Plant 9.86

(1) 4.38 (1) -0.76

(3) 5.62 (3) -0.52

(4) 4.38 (2) 1.30

(5) 9.08 (10) -3.32’

(2) 7.56 (6) -2.58’

(8) 7.66 (7) -0.14

(9) 6.64 (4) 1 98

(6) 7.12 (5) -0.02

(7) 10.18 (:3j -2.88’

(10) 8.30 (9) 0.42

(14) 10.50 (14) -1.04

(11) 9.92 (11) -0.88

(12) 10.66 (15) -1.52

(13) 7.96 (8) 1.26

(15) 10.04 (12) -0.18

5 6 2 2 5 0 1

3 3 2 2 5 2 2

0 3 2 4 5 2 3

1 2 4 5 0 i 2

5 3 2 3 0 0 0

3 2 0 1 0 3 0

3 0 3 0 2 1 3

3 2 3 1 0 0 c

0 ti 2 2 2 2 1

0 1 2 1 1 0 0

0 0 0 0 0 1 1

1 0 0 1 0 1 0

0 0 0 0 0 1 1

0 1 0 0 0 3 0

0 0 : 1 0 1 0

-

0

0

1

0

1

1

2

1

0

0

0

1

0

0

1 0 22 91.7 22 100.0

0 0 19 79.2 19 100.0

0 0 21 87.5 20 95.2

0 0 17 70.8 15 88.2

0 0 14 58.3 14 1000

0 0 17 70 8 IO 58 8

0 0 14 583 13 92 9

0 11 458 11 1000

0 c 10 41.7 1:: 1co fi

1 0 a 33.3 6 75.0

0 0 2 a.3 2 100.0

2 0 9 37.5 5 55.6

0 1 7 29.2 4 57.1

0 0 4 17.4 4 100.0

0 0 3 12.5 3 100.0

Total 24 22 23 23 20 18 13 8 5 1

tobl

91 i

79.2

a3 3

62.4

50.3

41.6

+I 2

.! F. 8

: 7

&O

fJ3

‘?(.9

‘67

- ; 4

:2.5

a Merch Pratt = Change merchandlslng practices, Labor = Gecrease costs through bet!er labor utll~ration, New Patron = P:t:~c!tng new patrons: irans Cost = Lowenng transpcrtatlor: (< 1:~.

Merge!Acq = Merger or acquisltton, Margins = lr!crease marglns: Mktg Serv = Addlng or droppng marketing serdlces lvLr Revenue = Increase revenue’ BlendKZlean = Cilange blend:i,S arid

c1eantr.g practices: DlsciPrem = Change discounts and premiums: Chg Mgmt = Change Internal cooperative structure NEU Crops = tiandle new types of crops: Ellm Prod = Ellmlca:a

product Ilne. Deer Costs = Decrease costs, Close Plant = Gecrease costs through plant closing

t Percent of managers selecting speclfled strategy.

* Represents a .05 percent level of significance for differences between the two yea:s
AppendbcTable ES- Frequency distribution of rankings of management strategies attempted, index, and differences in indices from 1988 to 1992 by

managers of 29 intermediate grain marketing cooperatives

Strategy a 1992

Index

1988

Frequency distribubon of rankings Tried b Successful

Percent of

Diff 1 2 3 4 5 6 7 a 9 10 # % # % toti

Merch Pratt 4.76

Labor 5.47

New Patron 5.16

Trans Cost 7.66

Merge/Acq 8.31

Margins 7.16

Mktg Serv 6.98

lncr Revenue 7.21

Blend/Clean 8.31

Disc/Prem 8.09

Chg Mgmt 8.29

New Crops 8.52

Elim Prod 9.12

Deer Costs 8.91

Close Plant 9.00

(1) 4.77

(3) 5.74

(2) 3.00

(7) 9.10

(10) 9.40

(5) 5.17

(4) 8.67

(6) 8.10

(11) 8.81

(8) 8.91

(9) 10.45

(12) 9.07

(15) 10.69

(13) 7.74

(14) 10.36

(2) -0.01 71382100 0 0 22 78.6 22 100.0 78.6

i4 -0.27 4 8 1 2 2 0 0 0 0 0 21 75.0 17 80.9 60.7

(1) 2.16’ 2 4 5 3 3 1 0 1 0 0 22 78.6 19 86.4 67.9

ill) -1.44 2 4 1 2 1 1 1 0 0 0 14 50.0 12 85.7 42.9

(12) -1.09 3 0030000 0 0 8 28.6 6 75.0 21.5

(3) 1.98 32311000 1 0 23 82.1 11 47.8 39.2

(7) -1.69* 0 4 1 1 4 4 1 0 0 0 16 57.1 15 93.8 53.6

(6) -0.89 23212000 0 0 10 35.7 10 100.0 35.7

(8) -0.50 1 0 4 1 0 0 0 0 0 0 7 25.0 6 85.7 21.4

(9) -0.82 00305300 0 0 15 53.6 11 73.3 39.3

(14) -2.16’ 2 1 0 1 1 1 1 0 0 0 7 25.0 7 100.0 25.0

(10) -0.55 0 0 2 2 1 1 1 0 0 0 9 32.1 7 77.8 24.9

(15) -1.57’ 0 0 0 1 0 3 1 0 0 0 6 21.4 5 83.3 20.0

(5) 1.17 00211100 0 0 5 17.9 5 100.0 17.9

(13) -1.36 21000000 0 0 4 14.3 3 75.0 10.7

Total 28 28 27 27 23 16 5 1 1 0

a Merch Pratt = Change merchandising practrces; Labor = Decrease costs through better labor utrlrzation; New Patron = Attracting new patrons; Trans Cost = Lowenng transportatron costs;

MergeiAcq = Merger or acquisition: Margins = Increase margins: Mktg Serv = Adcrng or dropping marketing services; lncr Revenue = Increase revenue; Blend/Clean = Change blendrng and

cleaning practrces; DisciPrem = Change discounts and premiums; Chg Mgmt = Change internal cooperative structure; New Crops = Handle new types of crops; Elim Prod = Eliminate

product line; Deer Costs = Decrease costs: Close Plant = Decrease costs through plant closing.

b Percent of managers selecting specified strategy.

l Represents a .05 percent level of srgnificance for drfferences between the two years.
cc Appendix Table ES- Frequency Distribution of Rankings of Management Strategies Attempted, Index, and Differences in indices from 1988 to 1992 by

Managers of 17 Conservative Grain Marketing Cooperatives

_.

Index Frequency distribubon of rankrngs Tned b Successful

Percent ot

Strategy a 1992 1988 Diff 1 2 3 4 5 6 7 0 9 10 # % # % total

Merch Pratt 4.14

Labor 3.53

New Patron 5.18

Trans Cost 7.03

MergelAcq 7.44

Margins 7.29

Mktg Serv 6.65

lncr Revenue 8.91

Blend/Clean 7.50

Disc/Prem 7.61

Chg Mgmt 9.09

New Crops 9.76

Elim Prod 9.20

Deer Costs 9.76

Close Plant 9.76

(2) 3.73 (2) 0.41 5 2 1 2 2 0 0 0 0 0 14 87.5 12 85.7 75.0

(1) 7.73 (4) -4.20’ 4 5 1 3 0 0 0 0 0 0 13 81.3 13 100.0 81.3

(3) 3.29 (1) 1.88 1 3 0 6 0 1 0 0 0 0 15 93.8 11 73.3 68.8

(5) 8.91 (11) -1.88 1 1310000 0 0 6 37.5 6 100.0 37.5

(7) 8.79 (10) -1.35 2 1 1 0 1 0 0 0 0 0 6 37.5 5 83.3 31.2

(6) 7.06 (3) 0.23 1 0 2 1 2 0 0 0 0 0 11 68.7 6 54.6 37.5

(4) 8.79 (9) -2.14 0 1 3 0 4 0 0 0 0 0 8 50.0 8 100.0 50.0

(10) 8.28 (7) 0.53 1 0 0 0 0 1 0 0 0 0 2 12.5 2 100.0 12.5

(8) 8.24 (6) -0.74 0 2 3 0 0 0 0 0 0 0 5 31.3 5 100.0 31.3

(9) 9.03 (13) -1.41 1 0 2 1 1 0 0 0 0 0 7 43.8 5 71.4 31.3

(11) 10.21 (15) -1.12 0 0 0 1 0 1 0 0 0 0 2 12.5 2 100.0 12.5

(13) 8.68 (8) 1.09 0 0 0 0 0 0 0 0 0 0 1 6.3 0 0.0 0.0

(‘2) 9.00 (12) 0.21 01000000 0 0 1 6.3 1 100.0 6.3

(13) 8.18 (5) 1.59 0 0 0 0 0 0 0 0 0 0 0 0.0 0 0.0 0.0

(13) 9.97 (14) -0.21 0 0 0 0 0 0 0 0 0 0 0 0.0 0 0.0 0.0

Total 16 16 16 15 10 3 0 0 0 0

a Merch Pratt = Change merchandising practices; Labor = Decrease costs through better labor utilization; New Patron = Attracting new patrons; Trans Cost = Lowering transportation costs;

Merge/Acq = Merger or acquisition; Margins = increase margins; Mktg Serv = Adding or dropping marketing services; lncr Revenue = Increase revenue; Blend/Clean = Change blending and

cleaning practices; Disc/Prem = Change discounts and premiums: Chg Mgmt = Change internal cooperative structure; New Crops = Handle new types of crops; Elim Prod J Eliminate

product line: Deer Costs = Decrease costs; Close Plant = Decrease costs through plant closing.

b Percent of managers selecting specified strategy.

l Represents a ,051 percent level of significance for differences between the two years.
Appendrx Table 87~~ Frequency distribution of rankings of management strategies attempted, index, and differences in indices from 1988 to 1992 by

managers of 21 small (storage capacity) grain marketing cooperatives

Strategy a 1992

Index

1986

Frequency drstnbutron of rankings Tned b Successful

~-. ___-.___ -~----- Percer,t ,-:

Diff 1 2 3 4 5 6 7 0 9 10 # % # % lOtA

_-.._ ..~ ~_

Merch Pratt 6.11

Labor 5.11

New Patron 5.21

Trans Cost 6.64

Merge/&q 6.93

Margins 7.10

Mktg Serv 6.76

lncr Revenue a.55

Blend/Clean a.38

Disc/Prem 7.70

Chg Mgmt 9.64

New Crops 8.76

Elrm Prod 9.62

Deer Costs 9.55

Close Plant 9.88

Total

(3) 3.97 (2) 2.14 4 0 3 4 1 1 0 0 0 0 15 71.4

(1) 6.10 (3) -0.98 3 6 2 1 1 1 0 0 0 0 14 66.7

(2) 3.36 (1) 1.86 1 5 2 4 0 0 1 0 0 0 16 76.2

(4) 10.38 (13) -3.74’ 4 2 1 2 1 0 0 0 0 0 IO 52.4

(6) 9.48 (11) -2.55’ 4 2 0 1 0 0 0 0 0 0 9 42.9

(7) 6.74 (4) 0.36 1 1 3 1200000 16 76.2

(5) 8.07 (8) -1.31 1 2 1 1 5 1 0 0 0 0 11 52.4

(10) 7.29 (5) 1.26 2 0 1 0 0 0 0 0 0 0 3 14.3

(9) 8.38 (9) 0.00 1 1 1 1 0 0 0 0 0 0 4 19.1

(8) 7.81 (6) -0.11 0 0 3 1 3 2 0 0 0 0 9 42.9

(14) 10.74 (14) -1.10 0 0 0 0010000 1 4.8

(11) 8.62 (10) 0.14 0 0 1 1 0 1 7 0 0 0 5 23.8

(13) 10.33 (12) -0.71 0 0 0 0 0 1 0 0 0 0 1 4.8

(12) 7.74 (7) 1.81’ 0 0 0 1 0 0 0 0 0 0 1 4.8

(15) 11.00 (15) -1.12 0 0 0 0 0 0 0 0 0 0 0 0 0

13

14

13

10

7

8

11

3

4

9

4

0

86.7 61 9

100.0 66.7

81.3 61.9

100.0 52.4

77.8 33.4

50.0 38 1

100.0 52 4

100.0 14.3

100.0 19 1

100.0 42 9

100.0 4 8

80.0 19.0

100.0 4 8

100.0 4 8

0.0 c 0

21 19 18 18 13 8 2 0 0 0

-

a Merch Pratt = Change merchandrsrng practrces’ Labor = Decrease costs through better labor utrirzatron FJew Patron = Attractrng new patrons, Trans Cost = Lowenng transportatron costs

MergeiAcq = Merger or acqursrtron, Margins = Increase margins: Mktg Serv = Adding or dropprng marketrng seIvrces. lncr Revenue = Increase revenue. Blend/Clean = Change blending and

cleaning practices; DrsciPrem = Change drscounts and premiums: Chg Mgmt = Change Internal cooperative structure, New Crops = Handle new types of crops E!rm Prod = Elrmrnate

product line: Deer Costs = Decrease costs, Close Plant = Decrease costs through plant closing.

b Percent of managers selectrng spectfred strategy.

* Represents a .05 percent level of srgnrfrcance for differences between the two years
Appendix gable BE-- Frequency distribution of rankings of management strategies attempted, index, and differences in indices from 1988 to 1992 by

managers of 24 medium (storage capacity) grain marketing cooperatives

_.~~

Index Frequency drstnbufion of rankings Tried b Successful

Percent of

Strategy a 1992 1988 Dlff 1 2 3 4 5 6 7 8 9 10 # % # % tobl

Merch Pratt 3.50

Labor 5.29

New Patron 5.79

Trans Cost 7.35

MergelAcq 7.17

Margins 8.35

Mktg Serv 6.60

lncr Revenue 6.65

ElendUean 7.33

DisciPrem 8.52

Chg Mgmt 8.27

New Crops 9.58

Elim Prod 9.06

Deer Costs 8.88

Close Plant 10.27

(1) 4.29 (2) -0.79 a 3 2 2 5 0 0 0 0 0 20 87.0 20

(2) 7.94 (5) -2.65’ 5 5 0 2 2 1 0 0 0 0 18 78.3 15

(3) 4.06 (1) 1.73 2 2 1 6 3 2 1 0 0 0 20 87.0 17

(8) 8.48 (9) -1.13 0 2 2 4 0 0 3 0 0 0 13 56.5 11

(6) 8.96 (10) -1.79 2 1 2 2 1 0 0 1 0 0 10 43.5 9

(10) 6.00

(4)

(5)

(7)

(’11)

(9)

14)

13)

12)

8.17

8.00

9.13

a.10

9.85

9.23

9.71

7.58

(3) 2.35* 1 1 1 2 1 1 0 0 0 0 16 69.6 7

(8) -1.56 1 1 4 0 4 4 1 2 0 0 17 73.9 17

(6) -1.35 2 4 2 2 0 1 0 0 1 0 12 52.2 12

11) -1.79 0 1 4 2 1 1 0 0 0 0 10 43.5 9

(7) 0.42 0 0 2 0 3 1 0 0 0 0 11 47.8 5

14) -I .5a 2101011000 6 26.1 6

12) 0.35 0 0 0 0 1 0 0 0 2 0 7 30.4 3

13) -0.65 0 1 0 0 0 0 2 1 0 1 8 34.8 5

(4) 1.29 0 1 2 0 1 2 0 0 0 0 6 27.3 6

(15) 10.50 (15) -0.23 0 0 1 0 0 0 0 0 0 0 1 4.4 1

100.0 87.0

83.3 65.2

85.0 74.0

84.6 47.8

90.0 39.2

43.6 30.3

100.0 73.9

100.0 52.2

90.0 39.2

54.6 26.1

100.0 26.1

42.9 13.0

62.5 21.8

100.0 27.3

100.0 4.4

Total 23 23 23 23 22 14 8 4 3 1

a Merch Pratt = Change merchandisrng practices; Labor = Decrease costs through better labor utrlization; New Patron = Attracting new patrons: Trans Cost = Lowenng transportation costs;

MergeIAcq = Merger or acqursition; Margins = Increase margrns; Mktg Serv = Adding or dropping marketing services; lncr Revenue = Increase revenue; Blend/Clean = Change blending and

cleaning practices; DrsciPrem = Change discounts and premrums; Chg Mgmt = Change internal cooperative structure; New Crops = Handle new types of crops; Elim Prod = Eliminate

product line; Deer Costs = Decrease costs; Close Plant = Decrease costs through plant closing,

b Percent of managers selecttng specified strategy.

* Represents a .05 percent level of significance for differences between the two years.
AppendkxTabie BS- Frequency distribution of rankings of management strategies attempted, index, and differences in indices from 1988 to 1992 by

managers of 26 large (storage capacity) grain marketing cooperatives

Index Frequency distribution of rankings Tried b Successful

Percent of

strategy l 1992 1900 Diff 1 2 3 4 5 6 7 8 9 10 # % # % total

Merch Pratt

Labor

New Patron

Trans Cost

MergelAcq

Margins

MMg Serv

lncr Revenue

Blend/Clean

Disc/Prem

Chg Mgmt

New Crops

Elim Prod

Deer Costs

Close Plant

3.33 (1) 4.81

4.29 (2) 4.62

5.04 (3) 3.25

6.52 (4) 8.50

6.71 (6) 7.58

6.54 (5) 6.77

8.87 (13) 7.75

7.65 (7) 8.10

7.65 (7) 9.81

8.31 (9) 10.04

8.87 (13) 10.65

8.65 (11) 9.84

8.85 (12) 10.75

9.28 (15) 8.38

8.44 (10) 9.15

(3) -1.48 5616301010 23 95.8 23 100.0 95.8

(2) -0.33 3 5 2 4 4 0 2 0 0 0 21 87.5 20 95.2 83.3

(1) 1.79* 0 3 4 3 5 2 1 2 0 0 22 91.7 20 90.9 83.4

(9) -1.98 0 2 5 2 0 2 0 0 0 0 13 54.2 11 84.6 45.9

(5) -0.87 4 1 1 3000000 9 37.5 9 100.0 37.5

(4) -0.23 5 2 0 0 1 2 0 1 1 0 19 79.2 12 36.8 29.1

(6) 1.12 1 2 2 0 1 0 2 0 0 0 10 41.7 8 80.0 33.4

(7) -0.44 2 1 2 0 2 0 0 1 0 0 8 33.3 8 100.0 33.3

(11) -2.15 0 0 4 0 1 2 0 1 0 0 8 33.3 8 100.0 33.3

(13) -1.73 1 12 1100010 10 41.7 7 70.0 29.2

(14) -1.78 0 00 111100 0 4 16.7 4 100.0 16.7

(12) -1.19 1 0 1 2010000 7 29.2 5 71.4 20.8

(15) -1.90’ 0001030000 5 20.8 4 80.0 16.7

(8) 0.90 0 0 0 0 0 2 0 0 0 0 2 8.3 2 100.0 8.3

(10) -0.71 2101010000 6 25.0 5 83.3 20.9

Total 24 24 24 23 19 16 7 5 3 0

’ Merch Pratt = Change merchandising practices; Labor = Decrease costs through better labor utrlization; New Patron = Attractrng new patrons; Trans Cost = Lowenng transportation costs;

Merge/Acq = Merger or acquisition; Margins = Increase margms; Mktg Selv = Adding or dropping marketing services; lncr Revenue = Increase revenue; Blend/Clean = Change blending and

cleaning practices: Disc/Prem = Change discounts and premrums; Chg Mgmt = Change internal cooperatrve structure; New Crops = Handle new types of crops; Efim Prod = Eliminate

product line; Deer Costs = Decrease costs; Close Plant = Decrease costs through plant closrng.

b Percent of managers selecting specified strategy.

* Represents a .05 percent level of significance for differences between the two years,
U.S. Department of Agriculture

Rural Business-Cooperative Service

1400 independence Ave., SW, Stop 3257

Washington, D.C. 20250-3257

Rural Business-Cooperative Service (RBS) provides research, management, and

educational assistance to cooperatives to strengthen the economic position of farmers and

other rural residents. It works directly with cooperative leaders and Federal and State

agencies to improve organization, leadership, and operation of cooperatives and to give

guidance to further development.

The cooperative segment of RBS (1) helps farmers and other rural residents develop

cooperatives to obtain supplies and services at lower cost and to get better prices for

products they sell; (2) advises rural residents on developing existing resources through

cooperative action to enhance rural living; (3) helps cooperatives improve services and

operating efficiency; (4) informs members, directors, employees, and the public on how

cooperatives work and benefit their members and their communities: and (5) encourages

international cooperative programs. FIBS also publishes research and educational

materials and issues Rural Cooperatives magazine.

The United States Department of Agriculture (USDA) prohibits discrimination in its

programs on the basis of race, color, national origin, sex, religion, age, disability, political

beliefs and marital or familial status. (Not all prohibited bases apply to all programs.)

Persons with disabilities who require alternative means for communication of program

information (braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at

(202) 720-2600 (voice and TDD).

To file a complaint, write the Secretary of Agriculture, U.S. Department of Agriculture,

Washington, D.C. 20250, or call l-800-245-6340 (voice) or (202) 720-l 127 (TDD). USDA

is an equal employment opportunity employer.